Can anyone explain how additional pension works in TPS?

IAMIAM

If you were to buy the maximum, say £7000 over 20 years. I namely want to ask,
Is this price fixed in now and not reviewable? So you will just pay monthly deductions for the next 20 years....
If you were to stop working before paying the full 20 years, can you do a lump sum to 'pay it off' before leaving service or what if you suddenly have inheritance and can afford to pay it off in a lump sum rather than 20 years?
Does the £7000 actually mean you will get £7000 at retirement as extra, or does it actually increase in value between now and retirement (in say 25 years time)
If my retirement age is 68 but I have buy out which bring me to 65, how will this impact is. Do I have to pay premiums based on 65 or 68?
Thanks,

kpk2000

I've just started TPS Additional Pension and from what I have researched/remember:
1 - Price is reviewed when the main TPS is revalued every so often - the contributions for the chosen amount can go up/down depending on the revaluation but you get the option to stop contributing and have whatever has been paid so far as additional pension (I assume that contributions will only ever go upwards though for the same amount!!!)

2 - not sure on this. All I can remember is that you can only have 20 years of payments if you are 20+ years from the TPS retirement age (assuming this is 68 in the current scheme)

3 - the £7000 is increased by CPI for each year until the TPS is taken (the main TPS benefits are CPI + 1.6% while in service)

4 - assuming you have bought/paid for £7000 by 65, then this will be actuarially reduced by the relevant factor (currently 0.851 I think from reading the tables but may be wrong). This would equate to an actuarial reduction to £5957 if taken 3 years early (obviously the £7000 would increase by CPI so it wouldn't be £7k by retirement date!)

I'm no expert but I've learnt from posts on the TES retirement forums and diddydave on their is very helpful - TES link

IAMIAM

Thank you for this. I was thinking of buying the full £7000 over 20 years and if I leave service, pay off a lump sum to pay off the balance if that makes sense. My only concern is if I retire at age 65 (having already done the 3 year buy out), am I forced to draw the additional pension too, meaning I am forced to take the actuarial reduction (or can I take my main pension without issue and leave the AP until 68). The increase in premiums every four years is a concern though!! Has this happened to anyone already?

When the premiums are shown on the flexibilities calculator, I am presuming this is before tax, meaning it will only cost me £160 if showing me £200 a month to be paid. 

What I like about additional pension is that it seems if ill health were to occur, regardless of the amount of the 20 years paid, you get the full amount if drawn down due to ill health. I am just unsure whether to pay for dependant benefit or not.

IAMIAM

kpk2000 said:

I've just started TPS Additional Pension and from what I have researched/remember:
1 - Price is reviewed when the main TPS is revalued every so often - the contributions for the chosen amount can go up/down depending on the revaluation but you get the option to stop contributing and have whatever has been paid so far as additional pension (I assume that contributions will only ever go upwards though for the same amount!!!)

2 - not sure on this. All I can remember is that you can only have 20 years of payments if you are 20+ years from the TPS retirement age (assuming this is 68 in the current scheme)

3 - the £7000 is increased by CPI for each year until the TPS is taken (the main TPS benefits are CPI + 1.6% while in service)

4 - assuming you have bought/paid for £7000 by 65, then this will be actuarially reduced by the relevant factor (currently 0.851 I think from reading the tables but may be wrong). This would equate to an actuarial reduction to £5957 if taken 3 years early (obviously the £7000 would increase by CPI so it wouldn't be £7k by retirement date!)

I'm no expert but I've learnt from posts on the TES retirement forums and diddydave on their is very helpful - TES link

Is the AP shown online? I remember reading they don't include it on your online account?
Is the value increased by CPI all the time, regardless of whether you are in service or not?